GW, shares and business stuff

http://www.lse.co.uk/AllNews.asp?code=qjocmh66&headline=Games_Workshop_Shares_Down_24_As_FirstHalf_Profit_Tumbles

Just did a google search after hearing it in a swedish 40k forum.

Ouch, 24% is a lot... Just thought you wanted to know.

Profits, sales, revenue and royalties all down by significant percentages. Not good news for any business.

Price increases and increased buy in to start the game versus similar products/competition offering more affordable gaming options at a quality level that doesn't seem in line to the disparity = less profits.

Color me shocked.

I ordered my current daemon army mostly from overseas. With overseas shipping and for products I consider of higher quality (certainly competitive) I payed about equal to or less than I would have paid for finecast or metal GW figures. Even with a discount. The current rulebook buy in alone for any given army is prohibitive, much less putting one together, meanwhile the same amount of money for GW's rules (since they're not a rules company, but a miniatures company) will get you a full and playable army in multiple other companies competing products.

I sort of hope that GW recovers from this, and even makes some business changes that I can look forward to. I will admit a certain feeling of plodding dread about it though.

I'm not solid in their business or in any business in general, but how does other companies compete with them? Do you think lowering prices on their stuff will be the answer? I think it does. Since if I want to get higher quality minis and pay extra, I'd buy from raging heroes for example. They got gorgeous minis but they are pricey. You really get good quality stuff for the money and they seem to do more than ok. GW has kinda become the lower budget and quality class except that many of their stuff is still too expensive.

facelessabsalom wrote:

I'm not solid in their business or in any business in general, but how does other companies compete with them? Do you think lowering prices on their stuff will be the answer? I think it does. Since if I want to get higher quality minis and pay extra, I'd buy from raging heroes for example. They got gorgeous minis but they are pricey. You really get good quality stuff for the money and they seem to do more than ok. GW has kinda become the lower budget and quality class except that many of their stuff is still too expensive.

I feel like you're handing me a bit of a mixed bag of messages here.

Okay, let's just answer each question in turn.

1. How do other companies compete with them?

By providing similar products. Privateer is, of course, the big one, but there is also Malifaux, Raging Heroes is planning to release their own rule set soon, Infinity, et al. I bet if I went to Kickstarter now I'd find half a dozen companies planning some sort of hobby style table top wargaming. That is the competition.

2. Is lowering price the answer?

Well...that depends. I don't really have access to their sales figures. They have, in the past, claimed to have done some experimentation with lowering prices and not found a real shift in turnover (what this means is, they sold similar things for different prices and still sold about 1,000 of each regardless of the price). I'm not sure I really believe their "research" there, but certainly as a hobby concept their core idea is sound insomuch as people in the hobby will likely pay $11 as readily as $9.

Now, that said, if you look at some of the competition, specifically in how the competition prices their rules (many offering said rules for free) and compare that to GW (functionally, right now, to play legit 40k you need the core rulebook, Escalation, Stronghold Assault, and your relevant Codex and this isn't counting if you have any dataslate stuff - so, basically around $150+ just to, y'know, have the rules) you see a marked difference. With Malifaux, for instance, I can go out, buy a starter box and the rulebook and for $80 and I'm good to start playing.

I think that probably they are hitting near the edge of the price for their product now, as many smaller companies, who are not producing in remotely the same bulk, are managing to turn out products of similar (and, some might even say better) quality and are being able to offer them for similar or more affordable prices. Since GW is the big dog on the block, they *should* be able to offer their products either more affordably due to bulk processing or with substantial quality upticks.

Currently I think they're failing at both, and I do think that's part of the reason their sales are dropping.
So, yes, price adjustments might help, a lot does depend on their finances and where the expenses and profits are though. Also, I think a lot of their issue is they have made a game that is significantly difficult to get someone to join because, to start up, you're asking for hundreds of dollars to play even a small game. No other competitor does it like that, they all encourage very affordable buy ins, and I personally think that's the aspect of this most likely to bite GW on the backside.

3. Raging Heroes as a more expensive but better quality alternative.

I would actually submit that, compared to GW, Raging Heroes is pretty much about in line. A box of 10 RH Preying Mantis figures with command upgrade bitz costs $43. A box of the GW daemonettes costs $30. RH Fantasy Blood Vestals cost about $54 for ten. GW Witches costs $60.

So, already, a smaller company with (I would say) better sculpts is already beating GW in the price game with current stuff, and even against some of the older more value minded stuff is at least not badly out of the ballpark.

4. GW is now the low quality option, but is too pricey.

Eh...I would say that GW's models are, on the whole, of very high quality. Really, as far as plastics go, I'm not sure I can think of a company that exceeds them on the technical side. I do think a lot of other companies do better on the look of their sculpts, and with metal/resin I actually think a lot of them compete and exceed.

I would say, as far as a playable game, that Malifaux is probably the true winner in the cheap department. I like a lot of their stuff, but at the end of the day their sculpts and published material is certainly inferior to GWs. That said, they also are filling a very solid niche, insomuch as they are eating up the skirmish market and giving people a very affordable game to get into.

Even PP, who pricewise is about equal to GW, is kicking butt due to their marketing paired with a game that, yeah, you pay $60 for ten figures...but then you almost have your whole army, whereas with GW 10 figures *might* net you one entire unit...amongst the twelve or so making up your army. That's a huge difference in how accessible the game is.

"1. How do other companies compete with them?

By providing similar products. Privateer is, of course, the big one, but there is also Malifaux, Raging Heroes is planning to release their own rule set soon, Infinity, et al. I bet if I went to Kickstarter now I'd find half a dozen companies planning some sort of hobby style table top wargaming. That is the competition."
None of which have a hobby centre system

DominicJ wrote:

None of which have a hobby centre system

I would note that there are probably a lot of gamers (I'm amongst them) who does not have any nearby hobby centers. I game at a local game/comic shop - not at a GW shop. I would say at my local shop that Warmahordes is basically as big and represented in available games as 40k, and is certainly moreso than Warhammer Fantasy.

If I want to get to a GW store, the closest one is about 2.5 hours away by car - and it's one of the 1 man shops, isn't open all the time, and doesn't have game space in any case. I think that's the only official one in the entire state of Florida, meaning my closest one is in Atlanta, which is...y'know, a wee bit of a drive.

My situation is certainly not unique, GW stores are not as prevalent in the States as they are in Europe.

So, for large swathes of GW's customers (let's just call it...33% that seems fair) the hobby centers, which is a unique advantage point for GW, just don't enter into the equation when they're picking their game - because they don't have one available enough to matter in the choice.

Thor665 wrote:

DominicJ wrote:

None of which have a hobby centre system

I would note that there are probably a lot of gamers (I'm amongst them) who does not have any nearby hobby centers. I game at a local game/comic shop - not at a GW shop.

I'm in the same boat. We have one in San Jose(35minute drive), but it's in a gigantic mall, has limited playing space, and is set up to cater to convincing parents to buy their ten year olds basic painting sets. I started playing 40K at a LFGS 25 years ago and have always gone that route when not playing Beerhammer in a buddy's garage.

Latest financials for GW are out. Not terribly good reading for the company although, to be fair, they continue to make a profit.

Perhaps why Kirby is thinking it is prudent to be stepping down in January, jump now before the agoniser strikes:

http://investor.games-workshop.com/wp-content/uploads/2014/07/Chairmans-Preamble-2014.pdf